On Fri, Jun 4, 2010 at 12:28 PM, David B. Shemano <[email protected]> wrote: > Raghu channels Paul Krugman below: > > I don't follow Krugman on a regular basis, so maybe there is an answer. But > does PK give any indicattion of a debt level he thinks would be too high, > where he would recommend no more? If he was Goldilocks, what would be "just > right" and how are policymakers supposed to recognize that point? >
The answer to your question is very easy: 1) There is no numerical debt level that is "just right" for all economies under all situations. But it is quite obvious that both extremes are absurd i.e. it is silly to argue either that the debt level always needs to be zero or that arbitrarily high debt levels are fine. 2) It is hard to tell what the "just right" debt level is, but it is trivially easy to tell when we are far from the "just right" level in either direction. Krugman and others have provided detailed and well-reasoned explanations for why they believe that the current US Federal debt levels are way too low. See for e.g. the following Krugman post and links therein: http://krugman.blogs.nytimes.com/2010/06/01/pre-refuting-william-galston -raghu. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
